Thoma Bravo announces deals in drug diversion sector; plus, generative AI in healthcare

Thoma Bravo backs medication intelligence firm Bluesight.

Good morning, Hubsters. Obey Martin Manayiti here standing in for MK Flynn this Monday morning.

Today we have a mix of industrial manufacturing and a couple of healthcare deals. I will also look at AI in healthcare, via a story written by my colleague Irien Joseph.

But first, let’s look at some deal news this morning.

Fighting drug diversion
Thoma Bravo announced this morning the closing of a growth investment in Bluesight, a medication intelligence company. Bluesight is coming as a platform investment.

Bluesight supports health systems with automated RFID-enabled kit and tray management through KitCheck, controlled substance diversion management through ControlCheck and drug purchasing optimization through CostCheck.

Additionally, Bluesight is adding Medacist to the fold, a company focused on drug diversion monitoring.

Bluesight’s acquisition of Medacist combines two innovators in drug diversion analytics and medication management solutions that together will serve more than 2,000 hospitals across North America, read a statement announcing the acquisition.

“The combination of Bluesight and Medacist capitalizes on the growing demand for software solutions that transform how health system pharmacies manage medication inventory and compliance,” said Carl Press, a partner at Thoma Bravo.

Drug diversion costs the healthcare system billions of dollars each year and presents a significant challenge that can only be addressed with deep industry knowledge and advanced technical capabilities, including machine learning, Press said.

“We believe the combined company is uniquely positioned to tackle this challenge and others, and we are thrilled to partner with Kevin and team to accelerate innovation and growth at Bluesight,” he added.

Industrial aftermarket
BBB Industries LLC, a manufacturer serving the automotive, industrial, energy storage, and solar markets that is backed by Clearlake Capital Group, has today acquired Hydraulex, a provider of critical, need-it-now hydraulic services for the industrial aftermarket.
BBB Industries is headquartered in Daphne, Alabama.

Hydraulex’s products power critical equipment spanning across infrastructure, industrial, construction, agriculture, mining, on-highway and marine equipment end-markets, according to the company.

“The acquisition of Hydraulex is an exciting development for BBB as we build upon the company’s foundation in sustainable manufacturing and expand into adjacent industrial end-markets,” said José E. Feliciano, co-founder and managing partner, and Colin Leonard, partner and managing director, at Clearlake in a statement.

Critical infrastructure applications
MiddleGround Capital, a Lexington, Kentucky-based PE firm, has sold EDSCO Fasteners, a Denton, Texas-based maker of anchor bolts, fasteners, and specialty-fabricated anchoring products used in critical infrastructure applications. The buyer is Commercial Metals Company.

Predominantly serving Utility Transmission and Distribution (“T&D”) structure manufacturers, EDSCO’s product offering includes anchor cages, 18J rebar bolts, smooth bar bolts, bolt hardware, plates, and other fabricated products.

“We are extremely excited for EDSCO to embark on its next phase of growth and will remain passionate advocates of the company and its remarkable team,” said John Stewart, MiddleGround founding partner in a statement.

AI in healthcare
Private equity firms are increasingly looking at the potential of generative AI and large language models in improving medical diagnosis, drug research and development, while also finding uses for the tech in the administrative end of the sector, writes my colleague Irien Joseph.

BPOC, a Chicago-based healthcare private equity firm, has been implementing AI at several portfolio companies. “We have seen, for the revenue cycle example, the ability to deploy bots that are custom-built to speed up processing a healthcare claim, which provides immediate savings for some of our portfolio companies,” said Greg Moerschel, managing partner.

There is also an opportunity in provider credentialing, a multi-step process that takes a lot of human capital, added Moerschel.

The BPOC managing director said the US healthcare system spends around $300 billion a year chasing down revenue, an inefficiency if compared to retail or financial services.
“Given this, the sheer computing power AI can deliver in terms of speed, ability to gather information and consistency will be a game changer for the revenue cycle in healthcare and, in some cases, even deliver better outcomes in care delivery.”

By the numbers
Bain & Co’s Private Equity Midyear Report 2023, released this morning, cast light on how macro uncertainty is keeping a lid on investments, exits and fundraising, and putting pressure on GPs to find ways to return capital to LPs.

But it appears not all firms are being equally affected, with EQT CFO Kim Henriksson telling Craig McGlashan, PE Hub Europe editor, that the firm’s investment volume nearly doubled from H1 2022 to H1 2023.

You can get more of Craig’s analysis on the report here.

That’s it for me today.

MK Flynn will be back with the newsletter tomorrow.

Have a nice day.